ENERGY TRANSITION: Solar power capacity growth requires guaranteed supply of minerals and metals

Enabling large-scale expansion of solar power production capacity is a crucial part of the transition to a sustainable future for energy, but its prospects of growth rest on the current and future availability of key minerals and metals.

Governments and organizations the world over are busy setting ambitious targets to cut carbon footprints and restrict global warming to less than 2 degrees Celsius above pre-industrial levels, in line with the Paris Agreement commitments on climate, and solar photovoltaic (PV) power production is crucial in these plans.

Among renewable energy sources, solar has been identified as a cornerstone of energy transition.

In its roadmap released in March, the International Renewable Energy Agency (IRENA) forecast that renewables will dominate the power generation mix by 2050. Electricity would be the main energy carrier with an over 50% share of direct energy use by then, more than double today.

As much as 90% of total electricity demand would be supplied by renewables, of which solar would be the single largest component of capacity.
In its sustainable development scenario, the International Energy Association (IEA) estimated solar PV capacity globally will increase more than fourfold in the next decade, from around 750GW in 2020 to over 3,00GW in 2030.

The large-scale deployment of PV power systems will require financial backing to enable it. Estimates for funding vary depending on the metrics used, but what is common is the magnitude of the forecasts.

BloombergNEF reported in February at least $14 trillion must be invested in the electricity grid worldwide by 2050 to support new energy usages.

IRENA estimated the solar sector alone will require as much as $237 billion in investment per year between today and 2050 to achieve its <1.5C scenario. That is a 106% increase from the $115 billion earmarked yearly in 2017-19.

At the same time, none of this will be possible unless supply of raw materials can keep up with the pace of demand. This is the crux of the matter, and where bottlenecks can arise on multiple fronts.

Demand for minerals and metals employed in solar and other energy applications will surge.

At the current pace of demand growth, energy sector mineral demand is set to double by 2040, according to the IEA. But to reach net-zero carbon targets globally by 2050, it would increase as much as sixfold.

The organization warned of “a looming mismatch” between the climate targets sets by governments and private players globally and the current and future supply scenario of raw materials.

This is a pressing issue for mining commodities employed in solar PV, which span from several minor metals to base metals including copper and aluminium, and minerals such as silicon carbide.

Copper prices have reached record highs in 2021 to date, amid lingering concerns over future supply due to a lack of investment in new projects over the past decade.

Fast-rising demand from China, the single largest consumer of the metal, supported the surge, until authorities in Beijing stepped in to try to shore up increases of costs to consumers.

Industry estimates state up to 20 million tonnes of copper will be needed for solar alone by 2050, with solar as the single fastest-rising application driving demand for the metal.

In its May report, the IEA saw a shortfall of 20% in copper production by 2030.

All thin-film PV panel technologies also require minor metals. Cadmium and tellurium are used in CdTe panels, which are growing their share of total output thanks to high conversion efficiency and comparatively low cost.

Tellurium is a byproduct of copper refining, and 40% of global output goes into cadmium telluride for solar. Tellurium prices were rising earlier this year due to tight supply, mostly in China.

Silicon, a key raw material in a-Si thin-film PV, has a few issues of its own. European capacity has been decreasing over past years after financially constrained producers exited the market. The slack has been gradually picked up by China, the single largest producer, which is selling more internationally.

Another side issue is that producing silicon is energy intensive. The market is underpinned by rising electricity fees in China, as well as the increasing costs of upstream raw materials (including silica, petroleum coke, soft coal, charcoal or electrode) at a time of rising demand, particularly from end-use sectors such as automotive, chip and photovoltaic industries.

Likewise, China dominates the global supply of silicon carbide with well over half of total output. Silicon carbide use is historically in the refractories and abrasives industry but is increasingly employed in PV applications to increase the efficiency of solar inverters.

While silicon carbide prices do not tend to fluctuate much compared with other metals, some started to rise this year owing to tight availability and growing production costs in China. The severe logistics constraints are an additional pressure point for consumers in destination markets outside Asia.

The recent price volatility and supply constraints in these markets show how exposed the solar industry is when it comes to securing stable supply of key raw materials.

Put simply, achieving the increase in deployment of solar PV needed to support the energy shift to a sustainable future is impossible unless there is sufficient future availability of minerals and metals to meet the fast-rising demand.


Ana de Liz and Cristina Belda in London, Rijuta Dey Bera in New York, and Ruby Liu in Shanghai contributed to this infographic.

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